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Senior market strategist says ‘Bitcoin is proving its value’ despite facing rate-hike headwinds

Senior market strategist says 'Bitcoin is proving its value' despite facing rate-hike headwinds
Jordan
Major
3 months ago
3 mins read

With Bitcoin (BTC) rising in price in recent weeks despite the prospect of a rate-hike on the cards the digital asset is proving its value to some market analysts.

Mike McGlone, a senior commodities analyst, has argued that long risk assets may be battling against the Federal Reserve (Fed). The commodities expert points out that Bitcoin may be the most risky investments among those available, facing headwinds as predictions of a rate-hike mount. 

However, McGlone also acknowledged “Bitcoin is proving its value” in a manner similar to that of 2020, when trading on the decentralized crypto network was very fluid in comparison to halts and limits in equities futures.

“Long risk assets may be fighting the Fed, among the riskiest — Bitcoin — faces headwinds as rate-hike expectations rise. Akin to 2020, when trading in the decentralized crypto network was relatively fluid vs. halts and limits in equity futures, Bitcoin is proving its value,” he tweeted.

Bitcoin is proving its worth. Source: Mike Mcglone

Bitcoin a hedge against inflation

The question of whether Bitcoin, the flagship digital asset, is a legitimate inflation hedge continues to rage on in the public discourse.

Earlier, Finbold reported Credit Suisse board member and fintech expert Blythe Masters, argued Bitcoin is not a threat to fiat money or the banking sector.

“I remain, somewhat to this day, skeptical of many of the arguments put forward as to why Bitcoin will ultimately prevail in pushing out fiat currencies and debasing the business case for banking,” she said.

When it comes to cryptocurrencies like Bitcoin, one of the key arguments was that they would not only replace fiat currencies, but that they would also operate as an inflationary hedge in the middle of a devaluation of money. 

As Masters points out, there is no evidence to support such efficacy at this time and it “remains yet to be seen.”

Proponents of Bitcoin

Nevertheless, proponents of the flagship digital asset would point towards such statistics which show Bitcoin’s inflation is now five times lower than the U.S. dollar’s and decreasing as of March 10.

The inflation rate of Bitcoin in January 2022 was 1.8%, showing that the digital asset had actually decreased its inflation rate by 0.1% in a little over a month. Meanwhile, according to data presented by Finbold, the U.S. dollar has depreciated sixfold over the past 50 years losing 86% of its original worth.

As things stand, Bitcoin is currently changing hands at $42,986 up 1.69% on the day after trading above $43,000 earlier in the day.

Bitcoin 1-day price chart. Source: CoinMarketCap

BTC is up a total of 4.88% in the last week with a market worth of $816.4 billion, according to data from CoinMarketCap.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.

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